Marital Property

Part IV

February 27, 2003

1981 – Hal and Wendy marry1982 – Hal’s father leaves him house which

becomes T/E1985 – Wendy contributes to IRA1986 – Hal buys condo from inheritance1994 – H & W separated1995 – Wendy wins lotteryMarital property?Will Hal get a monetary award?What effect will judgment of divorce have on

title to house?

Bar Problem – Supp. Page 155

Amount and Method of Payment of Monetary Award

• Court has discretion as to lump sum vs. installments

• Pension: if, as and when preferred to lump sum payment

Use and Possession of Marital Home and Family Use Property?

Available when:

1.

2.

3.

Standard:Contribution:

Use and Possession of Marital Home and Family Use Property?

Available when:1. Used as principle residence when parties lived together2. Owned or leased by one or both parties at time of div.3. Will be used as principle residence by custodial parent

and minor child(ren)

Standard: Best interest of the child vs. hardship to non-custodial parent

Contribution: Court may award non-custodial parent share of post sep payments

Particular Kinds of Property or Property Interests

1) Personal injury settlements; workers’ comp; contingent fees; future commissions:

- variations among jurisdictions - has there been marital initiative or effort to

acquire asset?2) Pension: number of years married

number of years employed3) Goodwill: Is goodwill transferable w/o owner or

professional?4) Appreciation: active (marital effort) vs. passive

Marital DebtsMD definition: debt directly traceable to acquisition

of marital property

ex.: $25,000 purchase money mortgage on home?

$25,000 home equity loan to finance year of college?

$25,000 home equity loan to purchase Lexus?

If debt deemed “marital” court doesn’t “distribute” or allocate between spouses in Maryland but relevant for either:

1) Reducing value of marital asset, or

2) Determining “economic circumstances of party” for purposes of monetary award or alimony

ALIMONY

Alimony – Historical Overview

Pre 1970’s

Available only to W

Fault – disqualifies

Only indef. or perm.

No monetary award

Modern

H or W

Fault = factor

Rehabilitative/Temp.

Mon. award can be combined

w/alimony

Goals of Modern Alimony1.

2.

3.

4.

Goals of Modern Alimony1. NEED/REHABILITAION: Absolute vs.

Relative

2. COMPENSATION/RESTITUTION: for non-monetary contributions to marriage

3. PUNISHMENT/REWARD

Analysis of Alimony Problem in Maryland

1st Question: Should H/W be awarded alimony?

Look at statutory factors2nd Question: If so, what kind?

MD: Rebuttable presumption that it should be rehabilitative unless1) age or illness make self-support

impossible2) even with rehab, incomes of party

still unconscionably disparate

Henry and Wanda

Should Wanda Be Awarded Alimony?

Factors favoring award of alimony to Wanda include:

a)

b)

c)

d)

e)

f)

Henry and WandaShould Wanda Be Awarded Alimony?

Factors favoring award of alimony to Wanda include:a) Duration of marriage – 20+ yearsb) Financial needs & resources of parties; H – a lot; W-

not muchc) Standard of living during marriage – highd) Wanda’s monetary and non-monetary contributions –

(put H through school and raised children)e) Ability of H to meet his needs while paying W

alimonyf) H’s misconduct

Henry and WandaHenry’s arguments against an award of alimony:

a)

b)

c)

Henry and WandaHenry’s arguments against an award of alimony:

a) W’s ability to be self-supporting – can teach

b) W’s AGE – cuts both ways

c) W’s likely monetary award

Wanda’s argument for indefinite alimony:

Wanda’s argument for indefinite alimony:

11-106(c)(2)(b) UNCONSCIONABLE DISPARITY:Even if Wanda retrained and gets teaching job her salary ($40,000?/yr.) will always be much less than H’s ($300,000+/yr.)

• 2-3X diff. - not enough • 8-10 enough • Here 7-8x – probably enough for indefinite

alimony

Henry’s argument for rehabilitative alimony:

Henry’s argument for rehabilitative alimony:

• Alimony’s primary purpose is REHABILITATION or NEED

• W has ability to become self-supporting

after a few year’s retraining

Assume the court awards Wanda alimony of $3,000 per month for four years beginning in July, 2002. What can the court do if, because of child’s special needs, she will not be able to complete her degree until July, 2007?

Assume the court awards Wanda alimony of $3,000 per month for four years beginning in July, 2002. What can the court do if, because of Harold’s special needs, she will not be able to complete her degree until July, 2007?

Extend the award of alimony as long as:

a) Cir. arise during alimony per. that would lead to harsh & inequitable result w/o extension

b) Must petition during period of award(Petition after award expires: too late)

What can Henry do if after the first year of paying alimony he becomes disabled and cannot work:

a) Petition for modification – lower amount

b) Petition for termination (termination if alimony recipient remarries or either party dies)